As the market for fullsize pickups and SUVs goes, so goes the fortunes of suppliers manufacturing the crucial metallic skeleton that contributes so much to the ride, handling and hauling capability of these large utilitarian vehicles.
Manufacturing and shipping these massive structures is neither easy nor cheap, but doing it profitably is an even greater challenge. For proof, note that two of the biggest players in the sector — Dana Corp. and Tower Automotive — landed in bankruptcy. Dana has yet to exit.
But one player is thriving in the sector and has grown at a stunning pace. Magna International Inc.'s Cosma International metalforming unit had zero market share in 1997, until it started producing frame components for General Motors Corp.'s GMT800 fullsize pickups.
From there, the upward trajectory has taken Magna Cosma to the No.1 position in frames for fullsize pickups and SUVs in North America, with more than 45% market share, says Frank Horton, executive vice president-engineering and technology at Magna Cosma.
Dana has approximately 30% of the North American frame market and Tower 15%, according to Magna Cosma estimates.
Key programs fueling the Canadian supplier's business are GM's new GMT900 pickups and SUVs — a platform that yields some 1.5 million vehicles annually — as well as Ford Explorer, Ford F-250 and F-350 Super Duty pickups and the Dodge Durango SUV and Dodge Chassis Cab commercial vehicle lineup.
Magna Cosma produces frames for these high-volume programs at its plants in St. Thomas, ON, Canada; and in Saltillo, Mexico. In Bowling Green, KY, Magna Cosma produces the F-250 and F-350 frames.
Dana has been the sole supplier of full-perimeter frames for the higher-volume F-150 for more than 30 years but said in a December filing with the U.S. Securities and Exchange Commission that it is required by Ford to share structural components and frame assembly with another supplier.
A bitter rivalry between Dana and that “other supplier” has been building since Magna Cosma won the GMT800 business more than a decade ago. It was a crushing blow for Dana, which had supplied frames for the previous-generation CK pickups for 10 years.
Magna Cosma won that initial GM contract partly because of its pioneering work in the emerging field of hydroforming, a cleaner, more efficient method of shaping tubular metal into complex forms by using highly pressurized liquid. The process generates less scrap than conventional stampings.
Hydroforming allows frame components to be manufactured and assembled with greater precision and dimensional predictability, which makes for improved ride and handling, says Mark Hogan, president of Magna International.
“One of the toughest things to overcome as a vehicle engineer on a pickup program was noise and vibration,” Hogan says. “You could chase it through the vehicle and find it in dimensional inaccuracies in the frame. Every millimeter counts. Every system has to be within certain tolerances.”
Dana's Structural Solutions business unit migrated quickly toward hydroforming and began using the technology in multiple applications. For the launch of the current-generation F-150, Dana built several customized “RoboClamp” presses for hydroforming full-length rails for the truck's frame.
Dana has four RoboClamp presses in use in the U.S. for F-150/Expedition and Lincoln Navigator frames. Dana also uses one in Europe.
But Magna Cosma continues advancing in hydroforming as well and employs the technology to produce the full-length frame rails for the F-250 and F-350.
For the new Chevy Silverado pickup (as part of the GMT900 program), the supplier hydroforms the front and rear rails and two crossmembers as part of the frame.
Magna Cosma has had the good fortune to be in the right place at the right time as its rivals have stumbled.
The supplier snapped up the Ford Explorer frame program after Tower announced in December 2002 it was withdrawing from bidding for the next-generation SUV.
At the time, Tower had been supplying frames for the current-generation Explorer, but the company issued a press release saying it didn't want to be involved in the forthcoming program because it wouldn't be profitable enough.
Hogan says he can't understand why Tower would withdraw from the high-volume Explorer program.
“I don't know any supplier that would reasonably turn down business unless there were capital or capacity issues,” Hogan says. “These days, it's hard to imagine anyone not having enough capacity.”
Hogan says Magna Cosma has been pleased with its experience in the Explorer program.
He declines to comment on the overall profitability of Magna Cosma's frame business, other than to say, “the Cosma part of Magna is doing well.”
Going forward, Hogan says he expects Magna Cosma's frame market share in North America will continue growing past the current 45%.
He says the Magna corporate culture will not allow complacency, as 10% of a program's profits are disbursed among the management and hourly workers at the responsible plants.
A Dana spokesperson says the Toledo, OH, supplier remains committed to its frame business and “continues to prosper” in the sector.
“We defend our current business emphatically and look at new opportunities as they become available,” the spokesperson says. “Dana is gaining business in the South American market, in particular.”
